A new era: Trends shaping China’s heavy-duty trucking industry

Investment Rating - The report does not explicitly provide an investment rating for the heavy-duty trucking industry in China. Core Insights - The Chinese heavy-duty truck (HDT) market experienced a significant decline in 2022, with sales dropping 45 percent year over year, but began to stabilize in 2023 with sales rebounding to approximately 900,000 trucks, including exports [2][4] - Key trends influencing the market include the emergence of new powertrains, partnerships exploring autonomous driving, increased exports, and customer pressure on pricing [2][4] Market Overview - In 2023, the domestic market achieved 616,000 truck sales, benefiting from the recovery of key sectors such as logistics and a GDP growth rate of 5 percent [4] - The market is projected to stabilize at around 800,000 trucks excluding exports, due to slowing economic growth and a shift towards rail logistics [4] - Exports accounted for about 30 percent of the total market in 2023, with 269,000 trucks exported, indicating a strategic shift by Chinese OEMs towards global markets [5] Powertrain Trends - Non-diesel powertrains are gaining traction, with CNG and LNG trucks accounting for 25 percent of the market share in 2023, while battery electric vehicles (BEVs) made up about 5 percent [10][11] - The average transaction price of domestic HDTs rose by approximately ¥42,000 (about $5,800) from January 2018 to August 2023, driven by the increasing share of CNG/LNG and BEVs [13] Market Dynamics - The top five OEMs dominate the market, holding about 88 percent of the market share, and are expected to continue gaining market share at the expense of smaller players [13][15] - The report highlights the importance of battery swapping technology, which is anticipated to account for 60 to 70 percent of BEVs in China by 2030 [15] Strategic Implications - Chinese HDT OEMs are actively pursuing export opportunities, particularly in price-sensitive markets, and are localizing production in Southeast Asia [16] - The report suggests that OEMs should focus on emerging trends such as electrification and autonomous driving to adapt to new market realities [17]